Governor Scott Walker approves arena funding plan

Governor Scott Walker has worked out a deal to pay the portion of the $250 million for public funds for the Milwaukee Bucks Arena funding.

The state would be responsible for $80 million, and there is a cap at $250 million that the tax payers would be responsible for with the Arena funding.

\"It is cheaper to keep them,\" said Governor Scott Walker said in a press conference.

$419 million price tag

It would cost tax payers $419 million if there is no arena funding, according to Walker.

This is not just a benefit for city but for state of Wisconsin, according to Walker.

He said this is a 3 to 1 investment for the state's revenue.

Revenue is projected to include tourism dollars and professional basketball players income taxes.

There is a provision that if the Milwaukee Bucks were sold the public sector would be allowed first draw at the proceeds before the owners.

Milwaukee Mayor Tom Barrett said he has been working behind the scenes with the Milwaukee Common Council to keep them in the loop.

\"I'm working on a parallel level so that we can move this through the Milwaukee Common Council,\" Barrett said.

Milwaukee Bucks react to announcement

The Milwaukee Bucks released this statement about today's announcement.

“We're incredibly thankful for the leadership and commitment of state, city and county officials to put together a viable financing framework for this public-private partnership to build a new sports and entertainment district in Wisconsin. While there is still a lot of work to be done in a short time frame, this is a big step forward in our collective effort to build a transformative economic and cultural asset in downtown Milwaukee. We will continue to work closely with our public partners to make sure this historic effort is successful.”

Potential Park East Real Estate Development

Milwaukee County Executive Chris Abele discussed the potential real estate development opportunity for the Park East.

\"If there is a lot for giant opportunities in the Park East I don't know anybody that wouldn't leap at that opportunity,\" Abele said.

The real estate property revenue would increase a lot, according to Abele.

Marquette University's President Michael R. Lovell issue's statement

\"At Marquette University, we are encouraged by today's news on the new arena. We appreciate the many leaders who have worked diligently to drive this defining project forward. This is a significant step forward for what will be a historic milestone. We look forward to being the top tenant in the new arena, which will provide a tremendous state-of-the-art facility for our student-athletes. While we know steps remain to approve a final plan, we are confident that the new arena and surrounding developments will lead to long-term value through an increase in jobs, neighborhood stability, and will ultimately make the region a greater place to live, work, play and retire.\"

Miller Park Tax vs. Arena Funding Deal

“When evaluating any proposed arena plan, my first priority is to ensure that Racine and Kenosha county taxpayers are not subject to any new tax, or further continuation of the never-ending Miller Park tax. In addition, the city and county of Milwaukee need to make a sizable contribution to this project. The economic impact of an arena will be largely localized, and the cost-sharing of the public portion of the project should reflect that,\" Senator Van Wanggaard said in a statement.

In case of the Miller Park tax state law authorized a new tax. But there is no new tax this just authorizes the revenue currently from the convention center to pay for portion of the arena funding, according to Walker.

“I was not at the table for these negotiations so I'm looking forward to learning the full details of the Bucks arena financing plan. I will be carefully reviewing the details and having discussions with our caucus in the days ahead.

“The unfortunate part of this situation is that Republicans have led our state into a fiscal mess that makes all our budgeting decisions more difficult. If Republicans had made better financial decisions like reclaiming our federal health care money, then our state wouldn't be feeling this painful squeeze and would be more able to invest in such priorities as public schools, our universities and major projects.”

How the plan works?

How it works:

· For every dollar the state invests, state taxpayers will get a $3 return through income tax revenue.

· State and local governments will fund $250 million, or half of the total project costs, toward building the new arena without tax increases or state bonding.

o The state puts forward $4 million per year for 20 years, with the total state investment capped at $80 million.

o The city will contribute $47 million through the creation of a TID and paying for a parking structure in upfront cash.

o The county contributes $4 million per year over 20 years through a state debt collection agreement.

o The Wisconsin Center District uses existing revenue streams to finance roughly $93 million in bonding for the plan.

· Caps state contribution at $80 million toward the arena project.

· Caps the total public contribution to the arena project at $250 million.

· Claw back provisions included to protect both the state and local governments. If the Bucks leave they will have to pay back the public investment. The payback will be proportional to dollars contributed.

· Any cost overruns would be paid by other sources, but not the state.

· Maintenance and operations will be paid for by the team, not by the state or local governments.

· The team and its partners will contribute 50 percent of the cost of the project with local funding coming in at 39 percent and the state contribution estimated at 11 percent of the total cost.

Benefits of the plan:

· Protects state taxpayers from losses that would be at least $419 million over the next 20 years, including:

o Base income tax revenue generated by the Milwaukee Bucks and from the visiting teams of $6.5 million per year in state income taxes, or $130 million over 20 years;

o Income tax revenue growth estimated at $169 million over 20 years due to future contracts and estimated NBA pay increases;

o Taxpayer liability for the Bradley Center estimated at $120 million in costs over the next ten years.

· For every dollar the state invests, state taxpayers will get a $3 return through income tax revenue.